Selecting a Bank

Emma usually has about $1000 in her account at any given time during the month. She usually visits the ATM twice a week and is interested in banking online options. Bank R has 10 ATMs within a 5-mile radius of Emma's home. Bank S has 1 ATM 10 miles from Emma's work. Which bank should she choose? a. Bank R b. Bank S c. Bank T d. Bank R and S

(A) Bank R

Why is it sometimes easier to open an account with a bank rather than with a credit union? a. Most credit unions require some kind of affiliation, but banks will let anyone with money open an account. b. Credit unions usually require more paperwork than banks. c. Banks can generally open an account immediately, but credit unions require a waiting period. d. Banks can open accounts over the phone or online, but credit unions can only open accounts in person.

(A) Most credit unions require some kind of affiliation, but banks will let anyone with money open an account.

Based upon past experience, Bill expects to accidentally overdraft the account 2 times per year, unfortunately, due to unexpected changes and miscommunications. He expects no 2nd copies of statements, and to use network ATMs 4 times per month with State Bank (due to fewer in-network ATMs being available), or 2 times per month with Common Bank. He has $2500 to deposit to an emergency savings account for overdraft protection and thinks that the balance will be enough to cover most all overdrafts in the future if automatic transfers are made when needed. Based on the tables of fees, which bank is expected to cost the least amount in fees per year? a. State Bank is expected to cost the least. b. Common Bank is expected to cost the least. c. State Bank and Common Bank would have the same costs for Bill. d. The fees cannot be estimated in advance.

(A) State Bank is expected to cost the least.

Lucy will open a checking account and 3 savings accounts for different purposes (emergency fund, gift fund, and education fund). Which of the following items should not be among her main considerations in selecting these accounts? a. The account recommended for somebody with different needs. b. The amount of interest to be paid on deposits. c. Any advantages of having all the accounts at the same bank. d. Fees for having multiple savings accounts.

(A) The account recommended for somebody with different needs.

Based upon past experience, Barry expects no overdrafts. He expects no 2nd copies of statements. Barry estimates that he will use network ATMs about 5 times a month with either bank. Barry decides in the end to choose EECU. Assuming that both banks provide the necessary services equally well, and based upon the tables of fees given above, how much can Barry reasonably expect to save annually by choosing EECU in this case over E-town bank?

(B) $78

Vítor knows he must prepare and possibly prevent overdraft funds fees since they are charged automatically. Which statement below would be the least effective element of a plan Vitor could use to accurately estimate (or minimize) overdraft fees on the account? a. Always keep extra money in the account for such unexpected events. b. Use the debit card for a large number of small purchases and check the balance later. c. Always keep track of how much is being temporarily held d. Do not enter deposits into the register until they are verified as available.

(B) Use the debit card for a large number of small purchases and check the balance later.

Henry usually has about $300 in his account at any given time during the month. He limits his ATM visits to one per week and is interested in banking online options. Bank X and Bank Z have 5 ATMs within a 5-mile radius of Henry's work and his new home. Which bank should he choose? a. Bank X b. Bank Y c. Bank Z d. Bank X and Z

(C) Bank Z

Jenna wants to save a $10,000 trust fund she received when she turned 21, and add $50 per month as emergency funds. She has narrowed her search for a savings account to 2 banks, Bank A and Bank B. Bank A pays a fixed rate of interest, and Bank B pays a variable rate, but both rates are currently the same. Jenna's trusted friend advises her to make the selection based upon her banking needs in consideration of the other services and fees of the banks, because the interest rates are the same. If you were advising Jenna about how to choose an account based upon her own needs, what advice below would you not give her?

(C) Choose the variable rate because if it goes up, you will make a lot of money that will pay for the fees.

You are examining your choices of banks to open a new checking account. Potential costs include monthly maintenance fees, statement copy fees, and ___________. a. Credit cards b. Debit cards c. Overdraft fees d. Interest on deposits

(C) Overdraft Fees

Which of the following items may be a good consideration in selecting a bank? I. The bank sends a representative to the local mall to promote new applications. II. Number of ATMs or bank branches near where you live, shop, work, or travel. III. Knowledge of personal usage habits and needs.

II. Number of ATMs or bank branches near where you live, shop, work, or travel.